Of course the only money that the Dakhla branch will see will be for paying any fixed costs and the rest will safely stay in your UK LTD bank account 🙂
Moroccan's Sahara : 0% CIT 0% Income Tax 0% VAT
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Of course the only money that the Dakhla branch will see will be for paying any fixed costs and the rest will safely stay in your UK LTD bank account 🙂
Sounds good on paper but nowadays it is not so simple to open a bank account for a UK company without residing in the UK.
With residency in Western Sahara I can only assume that it will be almost impossible.
If with "residency in Western Sahara" you are referring to the company, only HMRC will know that the company is treaty non resident somewhere else.
That's true, it's difficult to open a UK bank account with a non resident director but i guess you have a lot more options than a Moroccan company.
A potential trick could be to open the bank account BEFORE asking the treaty non resident transfer. 😎
Why this website claims only 0 tax for 5 years?
https://www.dakhlaconnect.com/laayoune_int/tourisme_en.html
Aye we sure that companies there are tax exempt?
https://www.dakhlaconnect.com/laayoune_int/tourisme_en.html
Aye we sure that companies there are tax exempt?
Make sure Western Sahara is not excluded from the DTAA like Svalbard is for example.
Morocco has claimed authority over Western Sahara since 1975, but the United Nations (UN) does not recognize Moroccan control.
PwC website doesn't refer to definition of tax resident in Morocco law.
https://taxsummaries.pwc.com/morocco/corporate/corporate-residence
Edit:
Based on orbitax, company is resident if it is incorporated in Morocco or has its management seat in Morocco.
It could also work if UK company is treaty non resident in UK, but resident non domiciled company in Malta with Maltese resident director, but all the operations are based in Sahrawi Republic, and the profits are not remitted to Malta.
I am not entirely sure, but it seems to me that the Moroccan government has already (tried to) change the situation with several changes to the law/memo's.
My French is not the best, but the way I read it is that the tax exemption is ONLY applicable on the activity in the Southern Regions.
You will not be tax exempt from activities outside the region. Please correct me if I am wrong.
In practice, most of these companies just don't file any taxes. However, you would be mistaking if you think that the Moroccan government does not know this. They know, they are not THAT stupid.
I've been going to this country for nearly two decades now. If there is one thing you should be aware of is that, without some greasing of the gears over there, you will find yourself in a lot of trouble with authorities if they find out they can extort money from you.
So, in practice, I think there are a lot of companies with HQs in Dakhla that effectively pay 0% tax. I think, in practice, 99% of these companies are not REALLY tax exempt, and thus are illegally avoiding tax. They just don't report anything. For a foreigner to do the same, you need friends. If you don't have friends, you need to make them. It will cost some money to bribe the correct people. You need some local help with this, because they will f*ck you left and right if you don't know what you are doing.
Just my two cents.
Correct me if you think I am wrong. I actually hope I am wrong, because I think I can have this organized fairly quickly. Could have it up and running at the end of the month I would think (with local bank account, so problem would still be getting funds out of the country).
My French is not the best, but the way I read it is that the tax exemption is ONLY applicable on the activity in the Southern Regions.
You will not be tax exempt from activities outside the region. Please correct me if I am wrong.
In practice, most of these companies just don't file any taxes. However, you would be mistaking if you think that the Moroccan government does not know this. They know, they are not THAT stupid.
I've been going to this country for nearly two decades now. If there is one thing you should be aware of is that, without some greasing of the gears over there, you will find yourself in a lot of trouble with authorities if they find out they can extort money from you.
So, in practice, I think there are a lot of companies with HQs in Dakhla that effectively pay 0% tax. I think, in practice, 99% of these companies are not REALLY tax exempt, and thus are illegally avoiding tax. They just don't report anything. For a foreigner to do the same, you need friends. If you don't have friends, you need to make them. It will cost some money to bribe the correct people. You need some local help with this, because they will f*ck you left and right if you don't know what you are doing.
Just my two cents.
Correct me if you think I am wrong. I actually hope I am wrong, because I think I can have this organized fairly quickly. Could have it up and running at the end of the month I would think (with local bank account, so problem would still be getting funds out of the country).
I'm a local, if you guys give me list of questions, I can ask my accountant there and get you all the info you need.
Banks will open you an account without any problems, the only issue is it's not easy for money to leave the country. I'm not sure if you can easily just pay invoices to a foreign entity's bank account that you own, haven't looked into it. It's illegal to trade local currency for crypto, but nobody has ever been jailed for it there is still dozens/hundreds millions of volume being done every day exchanging crypto p2p (Binance p2p mainly), they were supposed to give some plan on regulating & legalizing crypto last year but was delayed for whatever reason. It's an extremely safe and loose/forgiving country especially lately with a s**t ton of foreign investments coming in. All focus is on turbo improving the country right now. Just make it look like you're employing people and being a positive to the country and you'll be fine. Stay away from money laundering and terrorism financing and you're golden. It doesn't feel like other countries where you feel like you should watch yourself even when you're not doing anything wrong/illegal. This is from a local's perspective though I'm not sure if they would treat foreigners differently.
I would like to take the challenge and get gold for opening a company there. As far as I think, it only makes sense if the company is tax free as otherwise, we have better options elsewhere.
Hence, could you please ask your tax consultant what the requirements are for the company to be tax exempt? This in particular is:
- Is there any economic substance requirement?
- Is there any requirement for the economic activities to be tied to local business (e.g. you either need to provide services to locally, provide services using local workforce, sell goods locally, manufacture goods locally, etc.)
- Is there any requirement for the company to be owned (min. x%) by a local resident/citizen?
Thank you very much.
If you can really get a tax exemption then heres a free business idea: set up an EMI or other fintech over there!
World's most unbanked populations:
- Morocco - 71%
- Vietnam - 69%
- Egypt - 67%
- Philippines - 66%
- Mexico - 63%
- Nigeria - 60%
- Peru - 57%
- Colombia - 54%
- Indonesia - 51%
- Argentina - 51%
World's most unbanked populations:
- Morocco - 71%
- Vietnam - 69%
- Egypt - 67%
- Philippines - 66%
- Mexico - 63%
- Nigeria - 60%
- Peru - 57%
- Colombia - 54%
- Indonesia - 51%
- Argentina - 51%
I think you just quote the ones from here
https://gfmag.com/data/worlds-most-unbanked-countries/The list is very, very incomplete to be honest. There are many, many more countries which are by far less banked. But the main issue is not the availability of banks, but the stability of the sector and the government's willingness to bail them out. You can check Tajikistan which went from 2% to 47% in just 6 years:
https://www.theglobaleconomy.com/Tajikistan/percent_people_bank_accounts/https://www.elibrary.imf.org/view/journals/002/2021/199/article-A002-en.xml
37. Parallel initiatives could usefully strengthen the deposit guarantee mechanism, to improve its operational capability and its contribution to financial stability. The regime of the Tajik Deposit Insurance Fund (DIF), established in 2003, underwent significant improvements in 2011, but was not tested until the liquidation of two small banks in early 2017. The execution of this first test ”“ both in terms of amount and promptness of payouts ”“ will be crucial to support the DIF's credibility in ensuring depositor protection and confidence in the banking system.
Ok, I think it is that the first 5 years are tax free only. So, I have a new idea. Why not open a company there, then use a US SM LLC to do business and tax the profits for 5 years in Morocco. After that, we open a new company and sell the US SM LLC to it and have another 5 years tax free.
Shall I go and try?
Shall I go and try?
Its not recognised by US or most countries - how are you supposed to transact in such case?
Wait guys. Aren't we talking about the Morocco controlled part of Western Sahara (i.e. the southern provinces of Morocco)?
@baltic7 please PM me.
I have checked the whole story of @SasuT. It seems to be true that there is indeed no VAT and no CIT in the southern provinces of Morocco, notably Laâyoune-Boujdour-Sakia El Hamra, Oued Eddahab-Lagouira as well as Es-Smara and Tan Tan. It seems that the rule is not an official rule, but more a de facto non-application of any taxes.
https://www.cese.ma/media/2020/10/Nouveau-modèle-de-développement-pour-les-provinces-du-Sud.pdf
https://revuecca.com/index.php/home/article/download/797/723
It seems to be true. However, there has been a lot of fraud such as a public transport company incorporated in Laâyoune that is actually operating in Rabat (with Laâyoune car licence plates). Hence, the government has been tightening the issues in 2017 by requiring the exempt companies to actually obtain tax numbers and they also started checking whether the companies are actually only working in the south.
https://medias24.com/2017/09/11/aucun-changement-du-regime-fiscal-des-provinces-du-sud/https://en.hespress.com/60053-moroccan-government-zeroes-in-on-tax-evasion-in-the-south.htmlhttps://fnh.ma/article/actualite-fi...ticulierement-avantageux-pour-les-entrepriseshttps://www.cfcim.org/wp-content/uploads/2017/08/Sud.pdf
What do you guys think now? Shall I go down and incorporate to save on taxes and report here?
Last edited: Feb 18, 2024
I trust more in sending my money to a Nigerian prince than in putting a single euro into the territories occupied by Morocco.
I see it, thread in 3 months on OCT: My bank account in Western Sahara has been frozen and the bank employees, instead of sending me a screenshot of the transfer receipt, have sent me a photo of an expense invoice in sisha and chicken tagine in a restaurant in Tangier. What I can do?
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